State Board of Equalization member George Runner defined the new so-called “Amazon Law” as both good and bad.
“Clearly Amazon will be committing to bring new jobs to into California by bringing in distribution centers and fulfillment centers and that’s a good thing. Which basically means they will then under the law, regardless have to collect the sales tax, because they will have clear presence here.”
“Absent a federal solution, which is highly unlikely in such a short time frame given all of the competing interests, we’ll be right back in the same mess in a year. The State of California will again be killing California jobs, driving away investment and inviting costly litigation.”
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The Board of Equalization has estimated that California loses over $1 billion annually from uncollected use taxes. Their analysis also shows that California currently loses at least $83 million annually in uncollected state and local use tax attributed to Amazon’s sales in California.
Governor Edmund G. Brown signed AB 155 today with an eye towards influencing Congress and the President.
“This landmark legislation not only levels the playing field between online retailers and California’s brick-and-mortar businesses, it will also create tens of thousands of jobs and inject hundreds of millions of dollars back into critical services like education and public safety in future years. It’s time for Washington to follow our lead and forge a bipartisan national solution,” Brown said.
AB X1 28, passed by the legislature and signed by the Governor in June as part of the budget, affirmed that out-of-state online retailers like Amazon must collect sales tax.
Today’s compromise legislation delays those tax collection obligations to give online companies time to seek an alternative national solution. In exchange for the additional window of time the bill provides, Amazon has pledged to create at least 10,000 full-time jobs and hire 25,000 seasonal employees in California by the end of 2015.
This will generate an estimated half billion dollars of capital investment in California. Amazon will also drop its referendum challenge to AB X1 28.
“Amazon is grateful for Governor Brown’s support of this bill and enactment of federal legislation, and we look forward to creating thousands of jobs in California,” said Paul Misener, Vice President of Global Public Policy for Amazon.
If Congress fails to act on nationwide legislation, online sales tax collection in California will begin September 15, 2012.
Runner was at the Valencia Country Club today speaking to fellow Republican members of the Los Angeles County Lincoln clubs.